Editorial: State should end film industry support

A Michigan film executive says the state should decide if it wants a viable movie industry in Michigan and, if it does, finance it properly with tax credits.

If it doesnít, said Hopwood DePree of TicTock Studios Holland, it should get rid of it.

If those are the choices, the state should get rid of its support.

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DePree and others are railing at Gov. Rick Snyderís budget proposal to reduce the cap on film production tax incentives from the current $50 million to $25 million.

The incentives may be good for the stateís economy, but they havenít been so good for the state treasury, not in these bad economic times.

The incentive program, organized by the administration of former Gov. Jennifer Granholm, refunded 40 percent to 42 percent of a production companyís qualified expenses, with no limit.

It had an important desired effect: It created a nascent film industry in the state centered in Detroit. It brought big-name stars to town, spread jobs around and provided interesting day work for many in the area as film extras.

The numbers seemed encouraging. According to an early 2011 report, the incentives generated $6 in economic activity for every $1 from the state in the previous two years, and taxes, fees and reduced unemployment offset some of the incentives. But, according to the Senate Fiscal Agency report issued earlier, incentives generated a meager 10 cents in tax revenue for every $1 in incentives.

Replacing Granholm, incumbent Gov. Rick Snyder reduced the incentive to $25 million, raising howls from the film industry. He jacked it up to $50 million for the current year before proposing to reduce it again.

Industry executives say the state hasnít given the industry an opportunity to establish itself with a consistent level of support.

They may be right, but the state pledged a high level of incentives at one of the worst economic times since the Great Depression. It helped offset severe unemployment, but itís fair to ask if the money would have been better spent elsewhere.

Other states are in the incentive business as well. Do our taxpayers need to compete with their taxpayers? Arenít the movie tickets, the popcorn and soda enough to support good films?